Taft’s sales revenue and sales taxes payable would be
63. A company has the following liabilities at year-end:
64. What amount should the company include in the current liability
section of the balance sheet?
Wall Co. sells a product under a two-year warranty. The estimated
cost of warranty repairs is 2% of net sales. During Wall’s first two
years in business, it made the following sales and incurred the
following warranty repair costs:
65. What amount should Wall report as warranty expense for year 2?
66. Milton Co. pledged some of its accounts receivable to Good
Neighbor Financing Corporation in return for a loan. Which of the
following statements is correct?
67. On March 1, year 1, Williams Corporation issued at 103 plus
accrued interest, 100 of its 9%, $1,000 bonds. The bonds are dated
January 1, year 1, and mature on January 1, year 11. Interest is
payable semiannually on January 1 and July 1. Williams paid bond
issue costs of $5,000. Based on the information above, Williams
would realize net cash receipts from the bond issuance of
68. On May 1, year 2, Winston Corporation received notification of
legal action against the firm. Winston’s attorneys determine that it is
probable the company will lose the suit, and the loss is estimated at
$5,000,000. Winston’s accountants believe this amount is material
and should be disclosed. Winston prepares its financial statements in
accordance with IFRS. How should the estimated loss be disclosed in
Winston’s financial statements at December 31, year 2?